Here are some key quotes from my latest podcast with Mark Fordyce, Founding Partner and CEO of Blue River Partners (part of IQ-EQ), discussing comprehensive back-office solutions:

“I always tell people to think about Blue River Partners as a comprehensive outsourced solution for alternative investment managers. We cover the broad spectrum of back-office services, everything from regulatory compliance and legal to accounting to operations to tax, IT and cybersecurity.”

“In 2008, when the world fell apart, we were looking for another business to start within the business. And the idea was to provide outsource back-office solutions to other managers outside of the one we were working for.”

“But I think we did have a competitive advantage early on in building our business in the Texas market. We eventually saw more competitors come in.”

“You talk to a lot of people and they say, ‘Well, I had that idea [to start an outsourced firm], I just never executed on it.’”

“One of the critical elements of our success was that we brought together the legal and compliance with the accounting and operations. And then if you think about most service providers in alternative asset space, they’re very siloed.”

“If you only need a 20% CFO, well, that’s the service we’re going to provide you. So we can be very cost effective, because we’re only providing the services that the client needs.”

“As managers reach a certain size or complexity, it almost necessitates some internal resources, whether that’s a CFO or CEO or some operational accounting person.”

“For the larger clients, you know, where you’re talking 10s of billions or hundreds of billions of dollars, those firms are looking for ways to make their back office more efficient as well.”

“I remember early on speaking with all the big prime brokers telling them about this great offering we have, and we’re going to outsource people’s back office, and they thought we were crazy.”

“Probably five years or so ago, in many cases, [outsourcing] became a preferred alternative to internal hires.”

“But those [downsizing decisions] are very difficult situations that require a lot of thought and consideration. And you know, there’s some compassion involved there. Because there are people’s jobs at stake. So it’s not something that we take lightly.”

“The firms who get the technology right, that piece of it right, are going to be the more successful firms. There’s no doubt about it.”

“We’ve seen a lot of consolidation around fund administrators in particular.  We see that every day, you know, us being acquired by IQ-EQ, and then acquiring Constellation.”